Kakao, owner of South Korea's most popular chat app KakaoTalk, will merge with its music subsidiary Kakao M, the companies announced.
Kakao M -- formerly Loen Entertainment before Kakao bought it for $1.6 billion in 2016 --services Melon, the country's most popular music streaming service.
The merger further aims to capitalize on the popularity of the chat app and music service. KakaoTalk already has a music message feature and an AI speaker, Kakao Mini, launched late last year.
After the merger, Kakao will also form a new subsidiary that will focus on making video content. It will invest and acquire new firms to grow the company into a content and intellectual property power house, it said.
The merger is expected to be approved July 5 and completed September 1.
Kakao is attempting to expand abroad. In March it announced the formation of a blockchain subsidiary that will be based in Japan.
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